The Influence of Social Exchange Mediators on the Impact of Human Resource Practices

Abstract

Many studies have been done to demonstrate the impact of human resource (HR) practices on firm performance. The relationships have been generally positive but not always conclusive. Early studies which attempted to measure the direct impact of human resource practices on their dependent variables, reported mixed results. These studies have measured the impact using different frameworks, at different levels and different outcomes. Since human resource practices are perceived by organizational members and implemented by leaders first before they can take effect, their impacts may be more suitably measured from a social exchange perspective. In this study, we combine HR practices with social exchange variables to demonstrate that it is the indirect rather than the direct impacts of HR practices that matter. The findings show that the two key social exchange variables of perceived organizational support (POS) and leader-member exchange (LMX) are important mediators in the relationship between HR practices and the organizational outcomes of trust, empowerment, commitment and intention to remain in the organization.